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New report providing guidance on innovation in renewable energy Power Purchase Agreements for corporates

New report providing guidance on innovation in renewable energy Power Purchase Agreements for corporates

Business
|
March 2018

Global law firm Norton Rose Fulbright, together with EDP and Nestlé presents new guidance on “Innovation in Power Purchase Agreement structures”. The report was released by the World Business Council for Sustainable Development (WBCSD) and aims to help power-purchasing companies overcome challenges and set up innovative, successful renewable PPAs.

According to Bloomberg New Energy Finance in 2017, the global capacity of renewable PPAs signed between corporate buyers and renewable energy sellers has increased by 32 per cent, achieving a new record of 19 GW worldwide.

As corporate PPAs have been explored in both mature and emerging markets, the challenges facing the sector and obstacles to corporate buyers have become clearer and better understood. The report provides a run down of these challenges and detailed insight into the innovations emerging in the market to address them and to accelerate deployment of more corporate PPAs in mature markets and to support opportunities in new markets.

The report also looks at where different PPA structures and different energy markets still show some commonality in approach with respect to the main features and risks relevant to sellers, corporate buyers and the lenders. In doing so, the report considers how further standardization can be achieved and the benefits that would bring.

Andrew Hedges, partner, comments:

“Drawing on over 10 years’ experience of advising on corporate PPAs around the world we were able to put together this guidance to bring companies up to speed on the growing opportunities in the sector as they look to move towards a greener supply chain.

“As the report highlights, the market is evolving to address the challenges and innovation is key to significantly increasing the number of corporate PPAs in the future.”

Norton Rose Fulbright is at the forefront of the global corporate PPA market. The firm has advised on over 50 per cent of the corporate PPAs signed in the UK over the last 6 years and on a number of significant corporate PPAs signed in Europe, such as the Krammer wind park in the Netherlands and on Nestlé’s direct power purchase agreement for 50 per cent of its UK demand.

The firm also advised an Allianz-led consortium, as proxy revenue swap provider, on the structuring and documenting of this innovative new product (as explored further in the WBCSD report) for a number of clean energy projects in the US, including the recent deal with Invenergy on the Upstream project.

Most recently Norton Rose Fulbright advised the University of New South Wales Sydney on its procurement of renewable energy under a long term PPA. The firm’s global team continues to support key players on the upscaling of renewable energy procurement across multiple countries and regions.

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Notes for editors:

Norton Rose Fulbright

Norton Rose Fulbright is a global law firm providing the world’s preeminent corporations and financial institutions with a full business law service. The firm has more than 4,000 lawyers and other legal staff based in Europe, the United States, Canada, Latin America, Asia, Australia, the Middle East and Africa.

Recognized for its industry focus, Norton Rose Fulbright is strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare. Through its global risk advisory group, the firm leverages its industry experience with its knowledge of legal, regulatory, compliance and governance issues to provide clients with practical solutions to the legal and regulatory risks facing their businesses.

Norton Rose Fulbright operates in accordance with its global business principles of quality, unity and integrity, aiming to provide the highest possible standard of legal service in each of its offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright Verein, a Swiss verein, helps coordinate the activities of Norton Rose Fulbright members but does not itself provide legal services to clients. Norton Rose Fulbright has offices in more than 50 cities worldwide, including London, Houston, New York, Toronto, Mexico City, Hong Kong, Sydney and Johannesburg. For more information, see nortonrosefulbright.com/legal-notices.